Delen Private Bank is reorganizing tasks within the group in the areas of delegated portfolio management, fund administration, and custodial services. This is intended to improve efficiency and strengthen governance.
Project Horizon is the name of the plan that has quietly taken shape in recent months. Its goal is “to simplify Delen’s group structure and centralize certain core functions,” according to legal documents and notifications to fund investors.
The reshuffling between the Belgian and Luxembourg entities is meant to streamline the group’s structure and enhance operational efficiency, so that costs related to IT, compliance, and risk management rise more slowly. Most clients will likely notice little difference, but internally it leads to numerous legal changes and transfers of IT systems.
Importantly, some points of contact with the Belgian or Luxembourg regulators will change as a result. The Antwerp-based private bank described the current division of responsibilities as “suboptimal,” with “increased complexity” complicating prudential supervision. The new organization, built around specialized entities, is intended to facilitate oversight by regulators.
Greater role for Luxembourg
The most significant change is the phase-out of Capfi Delen Asset Management, or Cadelam. This division is transferring its fund administration and risk management responsibilities to a Belgian branch of the Luxembourg management company Cadelux, leaving only delegated portfolio management activities. Cadelam will also cease providing management company (manco) services to third-party funds.
Cadelam will soon be merged into its parent firm, Delen Private Bank. “Following the merger, delegated portfolio management will be centralized at Delen Private Bank,” the Antwerp group said. Legally, the merger will take effect on May 4.
For the Luxembourg SICAVs Hermes Universal and Universal Invest, Delen Private Bank will become the official portfolio manager as of May 1, replacing Cadelam, according to recent notices.
Luxembourg will also take on a more prominent role in a second way. Custodian bank activities for Belgian UCIs (investment funds) will be transferred to a Belgian branch of Delen Private Bank Luxembourg. This entity will become the new custodian and party responsible for financial services, such as distributions to investors and the issuance or redemption of shares.
Several pension savings funds are reviewing what these changes mean for them in their general meetings in the coming days . The in-house Hermes pension fund, distributed via Bank Delen and sister bank Bank Van Breda, will naturally adopt the new structure, which takes effect on May 4.
VDK Pension Fund, from the Ghent-based savings bank VDK, said that following Cadelam’s withdrawal as manco it plans to appoint a new management company later this year to take over Cadelam’s role. The investment portfolio of that pension fund is not managed by Cadelam, however, but by DPAM.
No more duplicate functions
With Project Horizon, Delen aimed to definitively eliminate duplicate roles that have emerged over the years. “The group’s current structure is the result of numerous acquisitions, the evolution of investment fund regulation, and the development of activities over the past two decades. Similar activities are currently carried out by different entities,” the bank wrote.